Firms' profitability from firm-specific factor, environmental turbulence, and macroeconomic: evidence from Taiwan's food industry - A review

Joe-Ming Lee, Shiu-Wan Hung and Chiao-Ming Li
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Joe-Ming Lee: Department of Applied Economics, Fo Guang University, Jiaosi Shiang, Taiwan
Shiu-Wan Hung: Department of Business Administration, National Central University, Jung-li City, Taoyuan, Taiwan
Chiao-Ming Li: Department of Business Administration, National Central University, Jung-li City, Taoyuan, Taiwan

Agricultural Economics, 2019, vol. 65, issue 2, 93-101

Abstract: After a series of shocking domestic food safety scandals in the past few years, environmental concerns have risen in the eyes of the public. The aim of this paper is to analyse the relationships among firm performance, customer capital, R&D innovation, structural capital, firm asset, environmental turbulence, and the macroeconomy by using the panel data model on Taiwanese food industry firms during 2010-2016 and by examining the results of the multiple regime panel smooth transition regression (MR-PSTR) model. The findings show that environmental turbulence and the misery index have a negative relationship on firms' performance, while there is a positive relationship between customer capital and firm performance. However, under high environmental turbulence, customer capital and firm performance are negatively related, meaning that a firm's marketing promotion will be ineffective. This study recommends that the food industry establish a high degree of trust from society and consumers. It is also important for the food industry to establishes a positive attitude towards quality requirements.

Keywords: environmental turbulence; misery index; multiple regime panel smooth transition regression (MR-PSTR) model; structural capital (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:65:y:2019:i:2:id:134-2018-agricecon

DOI: 10.17221/134/2018-AGRICECON

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